Google’s paid-click revenue grew by an astounding 28 percent last quarter, thanks in part to a 5 percent rise in click prices. It’s likely that Google will set ad revenue records this fourth quarter also, due to the increase in holiday ad spending.
To online retailers, Google’s surge in revenue may be yet another sign that the marketplace is becoming more competitive. Such competition normally translates into smaller margins, and that’s bad news for online retailers. I would, however, like to share a different perspective.
Google’s surge in paid-click revenue may actually be a good sign for online retailers. Sure, cost per click was up 5 percent from last year’s third quarter, but that alone does not explain Google’s record-setting revenue. Google is a data-driven company, and I suspect that Google’s new CEO, Larry Page, is challenging his fellow Googlers to experiment with new ways to increase the rate at which ads are clicked.
Google has released many new features in 2011 that have either a direct or indirect impact on click-thru rates. It launched “top vs. side” reporting — see “For Google AdWords, It Pays to be on Top,” my article on that topic — and gave advertisers the power to include more content within their ads. It also made a number of subtle tweaks that make ads more appealing to searchers and browsers in general.
Moreover, for a number of years now, Google has rewarded advertisers whose ads garner the highest click-thru rates by giving them more visibility without requiring a commensurate increase in their cost-per-click prices. Advertisers who optimize the rate at which their ads get clicked will receive more total clicks at a lower cost per click. That’s a powerful incentive.
For this holiday season, more searchers will likely be clicking on ads than ever before. By improving your click thru rates, you can buy more of these clicks at a lower price, which gives you an advantage with your competitors.
Here are five tips for increasing your click thru rates this holiday season — based on the techniques we use for our clients at Exclusive Concepts.
1. Maximize Your Ad Real Estate
Google AdWords now allows you to include up to four ad extensions in your account, as follows.
Extensions allow you to provide more relevant information in your ads and increase the space your ads take up. See the example below.
Interestingly enough, we have found that the individual extensions themselves see low click-thru rates compared to clicks on the headline of the ad. So what’s the benefit? The presence of extensions allows an ad to build trust with shoppers and increase the visibility of the ad. Even though the extensions themselves don’t get clicked at high rates, in our experience ads with extensions receive more clicks on the headline than those without.
2. Customer Reviews
AdWords gives you to ability to showcase customer reviews from Google Product Search. Positive feedback is one of the best ways to increase prospective buyers’ trust in your store throughout the buying cycle. If your business has at least 30 unique reviews and a rating of at least four stars on Google Product Search, it is eligible to show the seller rating extension, which give your ads an additional snippet of text containing star ratings and a link to all reviews.
Searchers who see your company’s positive reviews will be more likely to click your ad.
3. Encourage Shoppers to Buy Now
As the holiday season counts down, remind shoppers that time is running out — to motivate them to click your ads.
Experiment with ad text such as “Order by 12/16 and receive your item by Christmas,” “Holiday sale ends 12/12,” and “Free shipping for the holidays ends 12/15.” Create ads that appeal to shoppers’ sense of urgency, their competitiveness, and their motivation to get a special deal.
4. Offer a Deal They Can’t Refuse
Your goal is to move inventory and maximize profit this holiday season. Your shoppers’ goals are presumably to purchase the best gifts they can afford. Utilize pay-per-click advertising to offer specific, compelling deals that motivated shoppers cannot ignore. Experiment with the following promotions and highlight them in your ad copy.
- “Buy One Get One Free”
- “Buy One Get One Half Off”
- “Buy More Save More”
- “Free Gift with purchase of item”
- “Free Shipping when you spend more than $250”
According to dozens of conversion tests we’ve run over the years, incentives like those above are not necessarily margin-killers. Often shoppers will spend more money with you — a higher average sale — if the deals you offer are compelling. In the end you may be able to grow your profits by giving away a little margin.
5. Monitor Your Competition
Identify your most successful competitors and browse their ads and websites throughout the holiday season. Use tools like SpyFu to see which keywords they are buying ads for, and compare the value propositions they promote in their ads and on their sites to yours. This research will help you to think more like consumers as you seek to persuade them to buy from you — rather than your competition.
For example, if you sell book covers, compare your covers to a competitor’s similar product and highlight where your products are better. For example, your competitor’s book cover may have the following weaknesses.
- No choice in patterns;
- $20 for just a cover; comparable accessories like penholders are an extra $30 to $40;
- Cheap fabric does not stretch.
From this research, you may create ad copy that reads something like this.
Save up to $20 on Book Covers
Our one-size fits all cover
Includes pen holder for just $15
Increasing your ad’s click thru rate is a critical part of optimizing your pay-per-click campaigns. As Google drives more potential shoppers to its ads, take advantage of this growing source of traffic — and revenue — by out-performing your competition.